The De Beers Diamond Mining and Marketing Company of South

question 4

Multiple Choice

The De Beers diamond mining and marketing company of South Africa became one of the most profitable and longest-lived monopolies in history.Which of the following has always threatened De Beers' control of the diamond market?

• A)Since few diamonds are ever destroyed, De Beers has constantly faced possible competition from other firms reselling diamonds.
• B)Competition from imitation diamonds. Technology has made it possible to make fake diamonds look exactly like real diamonds.
• C)Competition from other gemstones, including rubies and emeralds, that have become more popular over time.
• D)At different times in the past some countries have banned the importation of diamonds from South Africa for political reasons.

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Definitions:

Corporate Tax Rate

The percentage of a corporation's profits that is taken by the government as tax.

Revenue Recognition

The process of recording and identifying revenue in the financial statements when it is earned and realizable.

Percentage-of-Completion

An accounting method used to recognize revenue and expenses of long-term projects proportionally to the project's completion level.

Revenue Recognition

The accounting principle that dictates the conditions under which revenue is recognized or recorded, primarily focusing on the timing and amount.